Manitowoc to Acquire Enodis for $2.7 billion

Read More About

The Manitowoc Company Inc. announced today that it has been notified by the UK Takeover Panel that Enodis plc intends to recommend Manitowoc’s offer following completion of an auction process with Illinois Tool Works Inc. Manitowoc’s successful bid was 328 pence per Enodis share, resulting in a transaction valued at approximately $2.7 billion, including the assumption of Enodis’ net debt (approximately $249 million / £125 million as of March 29, 2008).

The transaction will be structured as a court-sanctioned scheme of arrangement under the laws of the U.K. and is expected to close in the fourth quarter of 2008. The transaction is subject to court approval in the U.K., the approval of Enodis shareholders, as well as regulatory approvals in various jurisdictions. The Takeover Panel has advised Manitowoc that Illinois Tool Works will withdraw its offer to acquire Enodis subject only to the posting of the scheme document relating to Manitowoc’s bid. The amount of ITW’s increased bid in the auction process was not disclosed by the Takeover Panel.

Listed in London and operationally headquartered in Tampa, Florida, Enodis, a global leader in commercial foodservice equipment with a variety of premier brands, reported revenues of £0.8 billion (US $1.7 billion) for the 12 months ended March 29, 2008. Enodis is one of the world’s leading suppliers of foodservice equipment, with products on the “cold” and “hot” sides of the industry. To date, Manitowoc Foodservice’s focus has been on “cold” equipment. A combination with Enodis will allow Manitowoc to enter two major new market segments, hot foodservice and food retail equipment, as well as expand its cold-side businesses.

Glen E. Tellock, Manitowoc president and CEO says: “Throughout this process, we reaffirmed our belief in the transforming opportunities that Enodis provides. Even at the higher price, we believe the strategic benefits of the combination are significant while remaining consistent with the strict financial disciplines that we have adhered to for all of our acquisitions. The enhanced global business platform resulting from the combination is expected to generate many benefits through deeper customer relationships, a more robust R&D process, and operating synergies,” Tellock explains.

Manitowoc believes that the successful integration of the two businesses will result in improved growth prospects and the opportunity to deliver significant synergies. Management currently estimates that, by 2010, the transaction will generate annual synergies of more than $80 million. Historical revenues for the combined companies for the most recently completed respective financial years exceeded $5.6 billion.

“We believe the expanded global footprint of the combined businesses creates an outstanding growth platform,” says Michael Kachmer, president of Manitowoc’s Foodservice segment. “With the world’s largest foodservice companies growing at rates well in excess of the overall industry, we should be well-positioned to partner with our customers in creating modern, efficient kitchens that deliver the dining choices that consumers want.”

The proposed acquisition continues Manitowoc’s history of creating global growth platforms through strategic acquisitions. “Enodis will provide the opportunity to replicate the tremendous growth strategy that we employed in the lifting industry,” Tellock adds. “The same elements are in place for this strategy to succeed again–industry leading brands, a global footprint to meet the specific needs of a global customer base, a commitment to technology, new product development, and world-class aftermarket services, all supported by a team of the industry’s most talented people.”
2008 EARNINGS OUTLOOK

Manitowoc believes the acquisition of Enodis is consistent with the company’s strategic and financial imperatives of profitable growth and value creation, driven by innovation, customer and people focus, and excellence in operations and aftermarket services. Assuming a transaction close in the fourth quarter of 2008, the acquisition is expected to be EPS accretive in 2009 and EVA positive in 2011. Although commodity cost headwinds in 2008 have been extreme, Manitowoc re-affirms its previous earnings guidance of $3.20 to $3.40 per share for the standalone Manitowoc business.
ABOUT THE TRANSACTION

The transaction is subject to certain closing conditions, including the approval of Enodis shareholders, regulatory approvals in various jurisdictions, and other customary closing conditions for a U.K. scheme of arrangement. Manitowoc has agreed to take the necessary steps to obtain these approvals. It is anticipated that this transaction will close by the fourth quarter of 2008. There are no financing conditions in the proposed acquisition.

J.P. Morgan Securities Inc. is acting as financial advisor and both Foley & Lardner LLP and Linklaters LLP are acting as legal advisors to Manitowoc in this transaction.

JPMorgan Chase Bank, N.A., Deutsche Bank AG New York Branch, Morgan Stanley
Senior Funding Inc., and BNP Paribas have agreed to provide financing. Manitowoc believes its solid balance sheet and rapid deleveraging ability will enable the company to maintain its strong financial profile and strategic flexibility. Manitowoc also expects that it will maintain its current corporate credit ratings of BB/Ba2 from S&P and Moody’s upon close of this transaction.